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News from EPI West Virginia University right-to-work study relies on flawed data and analysis

A recent paper on so-called right-to-work laws relies on flawed data and analysis, according to research by Economic Policy Institute economists Elise Gould and Josh Bivens and research analyst Will Kimball. Gould, Bivens, and Kimball analyze a recent paper by West Virginia University (WVU) School of Business researchers John Deskins, Eric Bowen, and Christiadi, and find that that the study relies on questionable research methods that skewed the results in favor of right-to-work legislation.

Deskins, Bowen, and Christiadi attempt to analyze the effect of right-to-work laws on employment. However, their paper does not have sufficient variation in right-to-work status within states during the study period to reach conclusive results. The authors misidentify Texas and Utah as having not been right-to-work states when in fact they were, leaving only one state that switched to right to work during their study period. Furthermore, the authors failed to include state fixed effects in their analysis—the industry standard for this type of research—which account for economic shocks or characteristics that are particular to a given state and not controlled for in other variables in the model.

“In a WVU study about the effect of right to work on employment growth, the authors mis-measured both right-to-work status and employment growth,” said Gould.

The EPI authors urged state legislators considering right to work legislation to rely on well-researched economic analysis to make an informed decision.

“The point of so-called right-to-work laws is to hamstring unions, thereby lessening workers’ bargaining power and driving down their wages,” Gould said. “This law has the potential to hurt all workers in West Virginia, union and non-union alike.”

Key points in other EPI reports that that can inform the debate in West Virginia include:

  • Right to work is associated with lower wages and benefits for both union and nonunion workers. In a right-to-work state, the average worker makes 3.2 percent less than a similar worker in a non-right-to-work state.
  • Through cutting wages, right to work may undermine West Virginia’s small businesses, which depend on the state’s residents having wages to spend.
  • Many of the arguments made by advocates of right to work ignore that under federal law it is already illegal to force anyone to be a member of a union, and it is already illegal to force workers to pay even one cent to political causes.
  • Companies that are primarily interested in cheap labor are going to China or Mexico, not to right-to-work states like South Carolina or Arizona.